1992 (10) TMI 183 - AT - Central Excise

Tribunal rules on Self Copy Paper exemption under Notification No. 44/86

The Tribunal upheld the decision denying the exemption to Self Copy Paper under Notification No. 44/86. The appeals by the appellants were dismissed, and ... Paper - Self-copy paper Issues Involved:1. Classification of Self Copy Paper under Tariff Headings.2. Eligibility of Self Copy Paper for Exemption under Notification No. 44/86.3. Interpretation of Exclusion Proviso in Notification No. 44/86.4. Validity of Demand and Show Cause Notices.Issue-wise Detailed Analysis:1. Classification of Self Copy Paper under Tariff Headings:The appellants manufacture Self Copy Paper, which is classified under Tariff Headings 4809.20 and 4816.00 depending on the width and manner of packing. The Assistant Collector initially approved this classification, stating that Self Copy Paper is distinct from carbon paper or other copying papers. However, the Collector (Appeals) later held that Self Copy Paper is a sub-classification of other copying and transfer papers, thus falling under the broader category described in the main heading.2. Eligibility of Self Copy Paper for Exemption under Notification No. 44/86:Notification No. 44/86 provides a concessional rate of duty for various kinds of paper but excludes certain varieties, including 'Carbon and other copying papers.' The Assistant Collector initially granted the exemption to Self Copy Paper, but the Collector (Appeals) reversed this decision, stating that Self Copy Paper falls under the excluded category of other copying papers. The Collector (Appeals) observed that the notification's proviso used a broader term, covering the entire gamut of copying or transfer papers, including Self Copy Paper.3. Interpretation of Exclusion Proviso in Notification No. 44/86:The appellants argued that the exclusion in the notification should apply only to carbon and other copying papers, not specifically to Self Copy Paper. They cited previous orders by the Collector (Appeals) in favor of other manufacturers, which held that Self Copy Paper is not covered by the exclusion. However, the Tribunal noted that the proviso to the notification does not follow the tariff sub-headings but goes by a broad description of goods. The Supreme Court's observation in Rohit Pulp And Paper Mills Ltd. v. Collector of Central Excise was referenced, emphasizing that the exclusion should be interpreted based on the description of the paper and its copying function.4. Validity of Demand and Show Cause Notices:The Department issued a show cause notice to the appellants, questioning their eligibility for the exemption. The Assistant Collector, in a subsequent order, confirmed the demand for duty. The appellants argued that the modified show cause notice issued on 4-1-1990 materially changed the basis of the original notice. However, the Tribunal found that the modification was merely a corrigendum and did not alter the main thrust of the notice, which was the denial of exemption under Notification No. 44/86. Therefore, the demand raised was valid.Conclusion:The Tribunal upheld the order passed by the Collector of Central Excise and Customs (Appeals), Pune, denying the exemption to Self Copy Paper under Notification No. 44/86. The appeals by the appellants were dismissed, and the Department's appeal against the order in favor of M/s. Kores (India) Ltd. was allowed. The Tribunal concluded that Self Copy Paper falls under the excluded category of other copying papers, and the exemption is not applicable.